Cost of Energy is Vital to Investors

Nicaragua is the country with the highest electricity costs in the region, and an increase of 24% has been announced for January 2012.

Wednesday, July 6, 2011

The issue was discussed by the Nicaraguan Foundation for Economic and Social Development (FUNIDES), which emphasized the negative impact on investment in the country. The announcement of an increase alone, brought about "uncertainty" among investors, "over whether they would find it profitable to increase their capital or open new businesses in the country."

The directors of the Foundation also noted that the high costs of power generation are a major barrier to economic growth, as consumers are forced to pay higher electricity rates.

It also recommended making adjustments to rates more regularly, allowing businesses to adapt gradually to the costs, instead of having to deal with sharp increases from time to time.

According to an article in laprensa.com.ni "FUNIDES recommended that the Government's energy policy contain "a contingency plan with specific dates on actions to be taken" in the face of possible delays in the start-up of renewable energy projects that are under development.

The replacement of the energy matrix will, according to FUNIDES, make Nicaragua more competitive, obtain price stability and break dependence on oil.

49 percent of current electricity generation is based on bunker fuel, 16.2 percent from steam, and 14.9 percent from hydropower. "



More on this topic

Uncertainty Discourages Investments in Nicaragua

October 2019

Between the first semester of 2018 and the same period of 2019, the flows of Foreign Direct Investment reaching the country decreased by 25%, a decrease that is explained by the uncertainty that predominates among businessmen, derived from the political and economic crisis.

According to official figures, from January to June of this year the country received $364 million in Foreign Direct Investment (FDI), which is less than the $483 million received in the first six months of 2018.

Nicaragua: Production Costs Could Increase

September 2019

In the country, the business sector expects an increase in operating costs in the coming months, as a result of the expected increase in the price of electricity in the short term.

The last official increase is effective since June 1, 2019, which was 3% in the average selling price to the final consumer in the country, passing the cost per megawatt from $219.8 reported in March to $226.5 since that month.

Nicaragua: Business Climate Does Not Improve

April 2010

Nicaraguan investors remain pessimistic regarding the country’s overall economic perspectives.

Funides, a foundation for economic and social development, conducted a survey among 67 companies between January and February 2010, finding that “investment climate remains much deteriorated”.

Business Climate in Nicaragua Worsens

June 2009

86% of the companies surveyed in the Coyuntura Económica report by Funides consider the business environment unfavorable for investment.

The Coyuntura Económica report for the first quarter of 2009 by the Nicaraguan Foundation for Social Economic Development (Funides, acronym in Spanish) shows the results from the survey which took place during March of this year at homes and companies.

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PRONicaragua

PRONicaragua, is the Nicaraguan Investment Promotion Agency, established in 2002. We are a non-profit, public-private institution whose mission is to generate economic growth and job creation in Nicaragua by attracting high-quality foreign direct investment. The Agency provides complimentary support services to qualified investors seeking investment opportunities in our country.
Operates in Nicaragua
Phone: (505) 2270 6400

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